So here is a terse review of my financial history, much of it smattered with bad financial decisions, but thankfully things have changed.

During my late teens/early twenties (now in my mid-twenties) I had a few credit cards and credit-related accounts. For some part I paid them almost devoutly, having a pretty stable income, often working more than 40 hours a week while going to school fulltime. Well, throw in some time working towards a dream-job and caring for some ill family members, and now I have some pretty bad credit.

Now, these accounts only probably only total to $4000 or so, and can be paid off rather quickly.

However, I'm afraid if I pay them off, and "stir up" old debt, it will hurt my credit score longer if I had just let them "fall" off in a few years.

Is my thinking correct? I have read that the FICO scoring system has been updated, and paying off old debt doesn't hurt or "renew" old bad debt, but I'm not 100% certain on that yet.

Any advice will be greatly appreciated.

If you 'stir it up' with on-time payments, or paid in full lump-sums then you will only add positive items to your credit report.

The main risk you take with not paying it, is the chance (and likely hood) that they will sue over the debt. If they do not do that within a state determine time-frame you would no longer be liable for the debt.

This means, they will most likely take action before that date!

Also, if your case were to end up in court you would no longer have a credit score to worry about but case files with your name as a defendant in a case involving unpaid debts. That is damaging to any type of deals in the future (assuming the person/company you are working with has access Google).

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Help Me Pay Off My Debt - A chronicle of my quest to be debt free! Please, comment on how I am doing!

Now, these accounts only probably only total to $4000 or so, and can be paid off rather quickly.

However, I'm afraid if I pay them off, and "stir up" old debt, it will hurt my credit score longer if I had just let them "fall" off in a few years.

Is my thinking correct? I have read that the FICO scoring system has been updated, and paying off old debt doesn't hurt or "renew" old bad debt, but I'm not 100% certain on that yet.

Any advice will be greatly appreciated.[/quote]

If you can pay off these accounts, you should do it! A "Paid/Closed" account is way better than an open/delinquent one. Just waiting for it to "fall off" your credit reports (CRs) is not financially responsible. Its basically the same as stealing. Like Dragkon said in his post, chances are the companies you owe this money to, or collection agencies (CA), will come after you. Deal with it before it becomes a law suit. That will stay on your CR for a lot longer, not to mention the headache of lawyers, court, etc.

If I were you, I would Look at your CR, see who has posted a trade line stating you owe money. Send each company a letter saying that you want to arrange some sort of payment plan. Send everything certified mail, return receipt requested (CM/RRR) so you have proof they received your letters.

Chances are, if it has been a couple of years, some or all of your debts have been sold to CAs. Try to deal w/the original creditor 1st.

If you can't, you need to send a debt validation letter, CM/RRR, to each CA that is trying to get money from you. CAs are notoriously unscrupulous in their tactics, so use caution when dealing with them.

Send/receive everything in writting. Never call them on the phone. They will lie and manipulate, use guilt, etc. Get a payment agreement established, in writting, BEFORE you send payment(s). If/when you send in payment(s), use only money orders, never checks or check cards. Never put you signature on anything you send to a CA. Signatures/checking account numbers have a way of being abused in that industry. The only info of yours they need is your name and current address.

I can tell you from experience that this process is long and frustrating, but it is better to deal w/it now than have it come back to haunt you later.

Hope this helps.